AFRICAN DAWN ANNUAL REPORT 2018 51 Accounting Policies continued IFRS 15 also includes extensive new disclosure requirements. The effective date of the standard is for years beginning on or after 01 January 2018. The company expects to adopt the standard for the first time in the 2019 financial statements. The group has embarked on a preliminary assessment , and it is unlikely that the standard will have a material impact on the group's financial statements as contracts are all short term. ° IFRS 16: Leases New standard that introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows applying IAS 7 Statement of Cash Flows. IFRS 16 contains expanded disclosure requirements for lessees. Lessees will need to apply judgement in deciding upon the information to disclose to meet the objective of providing a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the lessee. - IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. - IFRS 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor’s risk exposure, particularly to residual value risk. - IFRS 16 supersedes the following Standards and Interpretations: - IAS 17 Leases; - IFRIC 4 Determining whether an Arrangement contains a Lease; - SIC-15 Operating Leases—Incentives; and - SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard is not expected to have a material impact on the financial statements.
AFRICAN DAWN 2018 Annual Report
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